If you’ve recently recovered from bankruptcy, you may feel as though getting your finances in order is going to be an uphill battle. But there’s no need to put your investment dreams on hold because of what’s happened in your financial past.
You may still be able to get a Buy to Let mortgage on a property – it just depends on how long it’s been since your discharge date, how much you can put down as an initial deposit, whether or not you’re already a homeowner, and whether you can prove you have a secure and stable income.
What to consider when applying for a Buy to Let mortgage
A Buy to Let (BTL) mortgage is designed for people who are looking to purchase additional property and rent it out in order to make a profit on their initial investment. In the UK, there are no limits on how many properties one person can own, so, as long as you understand your responsibilities and duties as a landlord, it can be an incredibly lucrative way to generate capital.
When looking for a Buy to Let mortgage, price is a very important factor, as it will directly affect the viability of your investment. When working out how much you can afford, you will need to consider how much you will need to set aside for the payments on your residential mortgage (if you have one), as well as any other financial commitments that could affect your ability to keep on top of your BTL mortgage repayments. Remember, too, that Buy to Let deposits are significantly larger than those for a standard residential mortgage. You will usually need a bigger down payment to not only secure a mortgage in the first place but access the most competitive rates.
Buy to Let mortgages have been notoriously difficult to obtain in the past due to stringent income and affordability checks, not to mention volatile markets. For the best chance of success, it’s important to explore all your available options before making a decision on which lender to use.
How will having a history of bankruptcy affect your BTL mortgage application?
Bankruptcy – or “going bankrupt” – is the legal procedure that takes place when a person is unable to pay back their outstanding debts. It’s a means of liquidating their assets to pay back their creditors.
It is considered one of the more serious forms of bad credit. Having bankruptcy listed on your credit file can often reduce your chances of being accepted for a residential or Buy to Let mortgage – especially by many of the mainstream lenders, who will see you as too much of a risk to them.
If you have filed for bankruptcy, you won’t be able to apply for any kind of mortgage before discharge, which usually happens around 12 months later (but can be sooner, depending on the court’s decision). Once you have been discharged, the majority of high street lenders are unlikely to accept you for a mortgage for quite some time until you have significantly improved your credit score and proven that you have kept on top of your more recent repayments.
Though it’s trickier to get a deal after bankruptcy, there are a handful of lenders who offer specialist Buy to Let mortgages for people who have faced this issue previously. It’s vitally important that you work with an experienced broker who will be able to identify the right lender for you and avoid damaging your credit score even further by applying for a mortgage with unsuitable providers.
Why use a mortgage broker?
If you have any questions regarding getting a Buy to Let mortgage after bankruptcy, or you want to get quotes from the right kinds of lenders, contact CLS Money today.
Our advice will be invaluable at every stage of the process. We’ll be able to let you know how much you’ll be able to afford, explain what you can expect from the process, and advise you on how to move forward without spending money unnecessarily or damaging your credit score further.
It all starts with a free initial consultation, so get booked in now to explore your options in more detail. We’re available during the day, in the evenings, and at weekends – and we can chat with you online, over the phone, or in a face-to-face meeting.
CLS – Finding the right mortgage lender for every situation
CLS Money work with specialist lenders to be able to offer mortgage advice for those who find themselves in unusual financial situations. As specialist mortgage brokers, we know which mortgage lenders are appropriate to every situation. You may have a poor credit history, have been denied a mortgage application, or are looking for information while repaying bankruptcy debt; whichever the case, we're here to help.
Whatever your personal circumstances or credit record, we can help you get mortgage approval when most mortgage lenders would reject you. We scour the entire mortgage market to find the best solutions with the most preferable interest rates. There's hope for just about everybody, even when mortgage eligibility looks bleak.
For those who are looking to reduce their mortgage payments, find better mortgage deals or need assistance with outstanding balances, we're here for you too.
We have mortgage advisors ready to answer all of your questions:
All types of mortgage products
Specialist mortgage applications
Conventional mortgage applications
Getting a mortgage with adverse credit
Large deposit mortgages
Extending a home loan
Mortgages for those with negative equity
Opportunities for those with an unusual financial history or complicated personal income
Lower your monthly payments
You hold a complex credit file, unusual credit history or other credit problems
Bad credit mortgages
Mortgage advice for first time buyers, buy to let applications, on commercial and domestic properties
Missed payments mortgages
Equity release mortgages
Self employed, professional, or unusual occupation mortgages
We're here with all the professional advice for mortgages after bankruptcy, anything from the list above, and more. If you don't see a topic that fits your financial situation, give our team a call and we'll tell you about the lenders already offering mortgages to people just like you.
There are times we all struggle with our financial affairs, perhaps failing to maintain the good credit history we worked so hard to acheive. It's easy to get caught out by an unseen expense, taking payday loans that can be hard to keep up with, one thing leads to another, and before you know it you've been declared bankrupt. However, you can bounce back after your bankruptcy discharge, get a mortgage, and start to build your brand new good credit history.
Each expert mortgage advisor will guide you through all the steps of a new mortgage application, getting you on the property ladder in the new home you always dreamt of owning.